Dell EMC infrastructure chief David Goulden has announced he is leaving the company just a week after it reported flat revenue and declining demand for its storage solutions.
A spokesman confirmed Goulden's departure Friday morning, saying Goulden would stay on and be "fully engaged" until the end of the company's fiscal year in early February. He'll be replaced by company Vice Chairman, Operations and Technology Jeff Clarke.
The move puts Clarke, a 30-year Dell Technologies veteran, in charge of all the company's product business, leading its Client Solutions Group and its Infrastructure Solutions Group.
The CEO of one of Dell EMC's top enterprise partners, who did not want to be identified, said the company is being hammered in the sales trenches by Pure Storage, which reported a 38 percent increase in sales for the most recent quarter and is on its way to finishing the year with more than $1 billion in sales.
"Dell EMC makes great products, but the gap between them and the competition is not what it used to be," said the CEO. "Customers are looking at lower-priced all-flash products like Pure that are very, very good. We are making more money selling Pure than Dell EMC. When you are providing far superior solutions you can command a higher price, but when the gap is reduced you cannot command the same premium price. It is Economics 101."
The CEO said the management shakeup shows clearly that Dell EMC is going to be moving aggressively in the months ahead to better compete with Pure and other all-flash storage competitors. "The question becomes: Are the right incentives in place in a very competitive landscape to make it happen?" he said. "We are doing more Pure than we have ever done before and it is two times the margin of the Dell EMC business."
Goulden was with EMC for more than a decade before its $58 billion acquisition by Dell one year ago. Goulden's total pay package for the 2017 fiscal year, which ended Feb. 3, was $24.9 million, according to U.S. Securities and Exchange Commission filings.
The news of Goulden's departure comes a week after he outlined an effort to boost storage sales by hiring hundreds of salespeople and making changes to the way Dell EMC storage salespeople are compensated through modified incentive programs that better emphasize storage opportunities and better alignment of those sales teams.
"Storage orders declined in mid-single digits" in the second quarter, Goulden said during a conference call to discuss the company's second-quarter financial results last week. "We have robust plans to improve storage growth rates. The midrange price band where we have more work to do, we're adding salespeople, changing quotas and compensation schemes, introducing new products. That will help us do better in the second half."
Dell EMC's storage revenue was $3.7 billion, essentially flat compared with the previous quarter. Overall, Dell Techologies reported non-GAAP second-quarter revenue of $19.6 billion and a non-GAAP quarterly profit of $1.6 billion.
Last month, Dell EMC channel marketing chief Cheryl Cook introduced a slate of spiffs designed to encourage solution providers to double down on midrange storage products.
Goulden explained that while the market moves toward all-flash and hyper-converged solutions, traditional midmarket systems face declines. Also, customers now prefer to purchase storage on a flexible, consumption-based model, which also takes some of the revenue punch out of storage sales.